South Africa Wine, the national body representing the country’s wine grape producers and industry stakeholders, strongly opposes the government’s proposed excise tax increases on wine, which could see rates rise by up to 80%. This drastic measure, outlined in the recent Alcohol Taxation discussion document, poses a severe threat to the sustainability of the wine sector and its significant socio-economic contributions.
The wine industry already operates in a highly regulated environment, and there is a need for policy certainty. “These proposals could devastate our industry, driving job losses and forcing producers out of the market,” warns Rico Basson, CEO of South Africa Wine. “The wine industry supports over 270 000 jobs, contributes R56 billion to the economy, and plays a vital role in rural development. The proposed excessive increases in excise rates will destabilise this critical sector and harm communities already facing economic hardship.”
The national treasury intends to announce the new excise framework and proposed adjustments during the Budget Speech (February 2025), leaving the industry with only a 30-day submission deadline of 13 December 2024. South Africa Wine asserts that this timeline is unworkable, failing to provide adequate opportunity for meaningful consultation and impact assessment.
“We urgently call on the government to extend the deadline and reconsider these proposals,” says Basson. “The current excise regime, aligned with international standards, is achieving public health and revenue goals without compromising the industry’s sustainability. Instead of penalising compliant producers, the government should focus on combating illicit trade and strengthening law enforcement.”
The illicit alcohol trade, which already accounts for more than 22% of all alcohol in South Africa, will be exacerbated by high excise rates. It threatens public health, erodes government revenue, and undermines legal businesses. South Africa Wine emphasises that addressing this issue through improved oversight and enforcement would be a more effective policy approach.
From an international perspective, we can learn from other wine-producing countries, such as France, Italy, and Spain, which have almost zero excise rates. We view the wine and tourism strategy as a treasure trove, and in the spirit of the GNU, now is the time to encourage investments and erase any doubt from an investor’s perspective.
“The wine industry is not just an economic driver. It’s a cultural cornerstone of South Africa,” adds Basson. “Policy certainty is essential to protect the entire value chain, from vineyard workers to exporters, and ensure the industry continues to thrive as a reliable driver of employment, tourism, and investment.” South Africa Wine remains committed to engaging constructively with the government to find more balanced and sustainable solutions that support the sector while achieving public health and fiscal objectives.
"We urge the government to work with the wine industry to find a more balanced and sustainable approach to alcohol taxation, postponing any final decisions until after comprehensive consultations, and to limit the wine excise increase to a maximum of CPI in February 2025," Basson concludes.